Will the media ever report the real increases in overall current public spending?

By | Published: March 25, 2012

Last week there was a break through. I was phoned by a Dail Mail journalist. He had read my website and wanted to write a piece about the overall increases in public spending in 2010, 2011 and 2012.

He wanted to know where he could verify my statement about the government’s own figures. I told him they were all in Table 1.1 of the OBR 2012 Report, p11. ( as well as elsewhere) He looked it up and expressed surprise that it was so close to the front and so prominent. I suggested it showed that most media commentators and journalists do not read the original documents. He duly wrote the piece, and the Mail on Saturday included comment on it in their leader, saying spending is too high.

At 10.35pm last night (11.35 adjusted) the BBC rang and asked me if I could appear to review the papers on the Marr show. I said I was committed in the constituency on Sunday morning so that was not possible. They said they wanted me to be able to repeat that spending is going up, in my view. I said the point it is it has been going up according to the government, so all they had to do was read it out and apologise for consistently implying that overall current spending was being cut. They said they were interviewing Danny Alexander in the morning. I bet they did not put to him that spending was going up – they still can bring themselves to admit what is obvious and fully reflected in the official documents. I would be interested to hear from anyone who saw their show.

They do not report news. The report spin, or the world as they imagine it to be.

This entry was posted in Uncategorized. Bookmark the permalink. Both comments and trackbacks are currently closed.

46 Comments

Indeed, spin is all, it is prepared and put in from of the media in a form that saves them having to think much or do any work. They usually swallow it whole. The BBC in particular do this, as it already fits in with their big state, socialist “cutting too much too quickly agenda”.

“They do not report news. The report spin, or the world as they imagine it to be.”

Sounds like most of the Tory party. They do not govern Britain. They govern spin, or Britain as they imagine it to be.

That’s why the need to label all the people who actually understand Britain as being ‘self interested and ignorant’ in order to be able to ignore them. If they were actually in touch with reality they wouldn’t need to do that and the vandalism of society could stop.

I loathe the BBC, but today Andrew Marr actually stated that borrowing was up in real terms at 0.5% this year.

Mr Cameron unhealthy relationship with the NoW has come to haunt him and the latest sleaze will, once more, call into question his judgement. A PR man for goodness sake, albeit only a short while. Anyone would think he would get the press strategy right.

John, people naturally believed what they were told rather than read the facts for themselves (those that can read- a disappearing skill in the UK). MPs rely on it. However, what has the Tory party actually achieved in two years against the pledges and cast iron guarantees? How should the press report on their claims? Head lines such as: Sophistry, deceit, flannel or lies all over again?

Sleaze is back to its former glory in the Tory party after only two years in office. Why do the Tories claim they are making spending cuts to lead people to believe the cuts are getting rid of the UKs deficit when they have done no such thing and the majority of the cuts are kicked in the long grass to the next parliament? Why have they allowed Labour to make claims the cuts are too fast and too deep when borrowing, spending and taxation is up? Osborne said it would be 80/20 split to correct the deficit. Has he started on the 80% cuts yet? Has he told anyone the actual facts like you have?

Bullingdon boys on a jolly in the US when their minds and energy should have been totally fixed on the budget, our economy and the EU ramping up their claims for the transaction tax. No this was not important, they were on the president’s Boeing 747 for a 75 minute flight to watch a basket ball game. We all have to suffer the costs of their travel to the US and huge costs on our energy bills for their green agenda, as well as blight the landscape for wind farms, while these hypocrites are burning through the skies to watch sport. Remember Cameron’s stunt with the sled or cycling to work??

You appear to be in denial on the topic of political sleaze and have used voting stats to try to persuade us bloggers why UKIP will not get in office. However, I think you are wrong. People voted to get Labour out not to get the Tory party in office. No one knew what they stood for. On current form of policy progress, Tories do not stand a chance at the next election.

Votes will continue to drop as long as MPs are viewed with such disregard and labelled as self-serving greedy people who are primarily interested in themselves, then their political party before the voting public (a few exceptions of course). Someone will need to clean up Westminster in the near future.

We are all being fleeced by taxation and living costs while MPs still look after themselves in a different way. For example, have MPs pensions moved to CPI yet? Have tax free parachute payments stopped? The only people voting before long will be welfare lifers.

Lib Dems socialists bash business, want more and more tax, they want more immigration, they want the UK to be part of a European state. Lib Dems wants to change the culture of Britain- gay marriage, social engineering to get undeserving people into the best universities, HRA, CAP, wreck the defence of this country and do not want trident.

The Lib Dems came a poor third at the last election because no one wanted their policies. They lost the vote on AV and got bashed at by-elections.

Which party has been more successful? Wake up Tory back benchers you are being sold down the river.

Reply: Yes, MPs now have a higher contribution rate, and another rise in it coming soon, along with adverse changes to benefits as you wish.

Disaffected wrote: [JR] used voting stats to try to persuade us bloggers why UKIP will not get in office. However, I think [he is] wrong.

But why? UKIP only achieved a 3.1% share of the vote at the last election. [1] To achieve office they would need somewhere in the region of 31%. So for every person who voted UKIP in 2010, they would need another nine voters in the next general election – arguably more because the average age of a UKIP member is 72 (seventy-two).[2]

Disaffected wrote: […] The Lib Dems came a poor third at the last election because no one wanted their policies.

I suspect your opinion would have been different had UKIP won 6,836,824 votes 😉

In my experience the Conservative Party membership is similarly mostly pensioners. However, UKIP is growing and attracting younger people. The Tories are in rapid decline; DC has prevailed over a drop on membership from 350k plus to an estimated sub 100k. The most recent polls have UKIP at 8% and the Lib Dems are 11%. The media has now started to list UKIP as the fourth party. JR’s visceral rant at UKIP last week was motivated by the fear of losing votes.

What is wrong with old people? They have more time to notice political and environmental changes, they have more experience and knowledge and are less selfish. They are increasing in numbers and they tend to vote a lot more than younger age groups. Ignore them at your peril.

I think people will seek an alternative because all three main stream parties are exactly the same. If the Tory party represented the views of people like John then they might see a difference between Labour and Tory. Better to vote and get at least one thing you want than to vote and get nothing. I voted Tory all my life, not a chance while these lot are in charge.

The BBC is run by government clerks in the guise of broadcasters, & government clerks always want more government to justify their own pay & entitlements at the people’s expense, hence the Statist undertone of its output.

Peter Sissons revealed the culture at play in the News department when he quit

We need to drive this from the bottom up, by refusing to buy tv licences.
The Charter is up for renewal in 2016, so a drop off in licence fee income may send the desired message that the BBC should be switched to voluntary subscription or privatised.

To use any TV equipment to watch or record TV programmes as they are being shown on television.
This includes watching or recording streamed services and satellite TV broadcast from outside the UK. If you only watch on-demand services, then you don’t need a licence.

Don’t pay it. I don’t. I don’t watch tv.
Try it for a week and see how much more time you have to do interesting things and how much happier you are when you’re not being force few adverts every few minutes telling you “YOU MUST OWN THIS TO BE HAPPY”.

just buy a few cheap films/series off amazon every so often to give yourself something to watch when you just want to plonk down.
Personally I’d recommend american series as they are longer and a lot better than the tripe produced here (with the odd exception).

Today’s Marr show is here. It’s in the opposition’s interest to suggest that this government is heartlessly slashing public spending, though the media (especially the media paid for out of taxation) ought to report facts. Labour wants us to think the recovery isn’t happening because the govt is hurting the economy by not splurging cash on building bridges to nowhere and filling-in holes it’s just had dug. In fact, the economy is stalled because the giant squid that is the state is sucking the private sector dry while bad banks are propped up and the currency is debased through QE.

The Conservatives also want people to think that cuts are being made as it gives them all the justification they need to fire large numbers of people in the public sector and sell large parts of the public sector to private companies. They also don’t want their policies to be compared to Brown’s.

Mr Alexander was interviewed and was not confronted on deficit reduction. As you say, there seems to be an acceptance in the media and elsewhere that deficit reduction is in hand.

Even to a layman like myself who ignores spin and reads the original OBR and treasury documents, it is quite plain that the targets set in 2010 have been ignored. Borrowing will be approximately DOUBLE in 2012/13 and 2013/14 and more than TREBLE in 2014/15 from the 2010 forecast (ignoring the Post Office pension transfer).

Despite the continual stark warnings about the dangers of excessive debt, (“we’ll end up like Greece”, “you can’t solve a debt problem by borrowing”, etc), the Coalition also seems to have been seduced by the “buy now, pay later” mentality.

National debt is now expected to be 44% higher than when the Coalition came to power, i.e. greater than 76% of GDP.

The short answer is “no”. I often feel tempted to send the BBC a full list of McDougall’s spending cuts, leading to something like minimal government. It might help to educate the BBC as to what cuts really are. The problem is that if I did it in my own name, they would probably take no notice. If I did it in the name of the Conservative Party, all Hell would be let loose.

Given that Ministers are always talking about austerity and the need for big cuts is it any surprise that the media didn’t realise that the Government was actually increasing borrowing rather than reducing it.

I predict that at some point there will be a huge scandal when the media actually realises that borrowing is increasing.

I sometimes wonder how outfits like the BBC would react if there were ever a genuine cut. No doubt they’d shriek and wail that the sky is falling, that the economy would turn into a pumpkin tomorrow afternoon and we’d all be murdered in our beds tonight if the police had to stop crowning their fleets with Range Rover and Mercedes ultra-luxury vehicles – but could they possibly do so any more than they are already? Moreover they’d lose a lot of credibility when the opposite happened.

I doubt we’ll ever get to find out, though; missing open goals seems to be fashionable lately, as the government failed to take advantage of the digital switchover to put the BBC on conditional access (replacing the whole TV license bureaucracy with simple viewing cards like the non-compulsory subscription broadcasters use)…

Just like you don’t write about economics. Just your spin on world events.

Yet again, have you broken down the figures into just how much more has gone on benefits over the last 2 years as unemployment has continued to rise? How much less has been collected in taxes as a result?

Just wondering – again…

Reply: The figures I quote are governemnt figures. There are cyclical and structural figures on the deficit from the governemnt in the same source if you want them. This does not happen to be about the cycle but about spending levels. The economny is also in a period of slow growth, not contraction.

As JR points out the General Government Consumption has gone up in real terms (Table 1.1. of OBR March 2012 report). The OBR itself was surprised by this and offered an explanation later in the report (Secs 3.68 to 3.71 pages 63 to 64) at 3.69 this states,

“in cash terms, government spending on goods and services has been almost exactly in line with forecast. However, growth in the price of government consumption has been weaker than forecast, and weaker than whole
economy inflation.”

Now I’m glad you state these figures are supposedly cyclically adjusted, now we’re starting to make some progress. I would like to actually see them – hence a link would be nice.

That does suggest that to some extent the impact of the continued depressed economic activity (I never said we were in an economic contraction just that unemployment has continued to rise over the last two years) should be built in – but far from perfect. How do we know the adjustments made by the statistical agencies are correct? I don’t think they have that kind of information, which is why I always take seasonally unadjusted data if I can. What if the seasonality changes? What about the seasonality impact on, say, health spending? Extra resources going perhaps to mental disorders in difficult times like these?

So if you want to believe that these figures manage successfully to strip out all the cycle, since it supports your prior prejudice, go right ahead. I’m a little more sceptical however.

It’s probably also worth pointing out some of the extra health spending will be related to the protracted NHS bill – all those unnecessary top-down reorganisations that Dave railed against before getting into power must cost quite a lot…

Reply: The government publishes estimates of the structural and cyclical deficits, as you should know. The spending figures do not adjust for the deficit. A spending rise is a spending rise, for whatever reason, and needs paying for.

I don’t dispute the fact that spending is up and hence needs funding, I dispute your explanation of the spending rise (i.e. a lack of “real” austerity).

What I keep telling you is that there is a high correlation between the government’s balance (hence its need to borrow) and the level of economic activity which ought not really to be worth having to mention. You believe the associated causality is all one way (government activity to economic activity) – but that is a belief, based on no empirical analysis that you’ve cited to me, or that I’ve seen as yet anywhere.

If you choose to believe the government’s seasonal adjustments in order to allow you to try and legitimise your beliefs in some economic data, that’s all well and good, I’m just exploring what exactly it is you’re choosing to ignore to arrive at the conclusion you arrive at. You see, just because they publish them, doesn’t mean I should believe them, and whenever I do empirical work I try to avoid using any kind of seasonally adjusted data.

Reply: You could adjust the government’s real spendign increase figures for the small cyclical changes over the period they are measuring, by using the government’s figures. I suspect an accurate adjustment on government assumptions will not make much difference – the large below cycle level of output adjustment was in the figures before the latest increase in real spending as it occurred in the recession years.

The BBC is the Guardian in broadcast form – both have their strong points, albeit that they are essentially statist, pro big government organizations. The BBC often takes its lead from the Guardian and its own editorial position, though not party political, always come from a more spending is good position. I never heard a minister questioned for spending too much money or wasting money…though a program like Analysis on Radio 4 might take that point of view once in a blue moon, and investigate waste. They are more likely investigate – by a factor of 10 to 1 – wrong doing in business. A huge suspicion of business and little of the state characterizes the approach.

We may be severely inconvenienced by a tanker driver strike shortly and I do not think that anyone is looking forward to it but a strike at the BBC? That would be excellent “news”.
Do you remember the last time that the BBC was affected by strike action? The service improved dramatically without all the usual time-servers droning away on Radio 3 and Radio 4. The service was condensed and tightened up. The tone changed and became more straightforward. Proof that cuts work.
The BBC has been allowed to call the shots for too long. Slap them down hard Mr. Redwood. They need it.

Please can you give me a valid argument as to why I should vote Conservative? All last weeks budget ensured is that because of my wife’s earnings the child benefit will be going and I will be probably paying 40tax all so that someone from Poland can keep having their CB even though their kids in live in Warsaw? When is Cameron going to start doing stuff for the people who do the work, pay the taxes and obey the law? Gay marriage, reform of the House of Lords is not really on anybody’s agenda at the moment.

You need to make them aware that they cannot take my vote for granted just because there is nowhere else to go.

John, I am so pleased to see this article! The BBC is a major stumbling block to democracy – just see the row over ‘cash for access’ now, and compare it to the weak coverage by the BBC when Bliar was selling ‘cash for honours’.

PS I do not have a problem with business leaders paying to access decision-makers, the BBC want only people who come through them to access decision-makers, eg. the sick child who gets lots of publicity and then meets the PM.

The bias of the BBC in reporting on public spending is a terrible scandal. Newsnight had a presentation by Stephanie Flanders on public spending after the budget. It showed how 80% of austerity was coming from ‘cuts’ and 20% from tax rises. Nowhere was it mentioned that spending continues to rise. I suspect the reason this point isnt getting over is minsiters are rather embarrassed that they are not getting to grips with gross over-spending and waste in the public sector.

Mr Redwood,
I am pleased to see that you recognise how biased is the reporting of the BBC. It has been so for many years. But it is not only with regard to public spending that they present a Guardianist approach. Almost every other facet of their reporting is approached from a liberal-left perspective and it has become quite blatant as they realise the Coalition will do nothing about it. The main reason they persist in the “savage cuts” approach is because by doing so it lets them denounce the Conservative philosophy which they hate with a passion only found in the columns of the Guardian’s Cif. If they were to tell the truth, that spending is actually going up, there would be no “Evil Tories” to attack.

Most of BBC news output is carefully constructed to fit their left-wing agenda. For example, the recent killings in France of Jewish children were immediately presented as the work of “far-right extremists”, and a direct consequence of Sarkozy’s speeches on the issues of immigration and integration. This was the pre-determined agenda for two days across their monopolistic broadcast news empire. I watched Newsnight, as Paxman and invited left-wing guests propagated this rhetoric. The French Govt. Minister, appearing via a link, was incredulous at their attempts to push a leftist political agenda before the facts were known. The BBC and their cohorts amongst the NUJ were, of course, completely wrong.

It’s not just that Government spending is still raising? It’s also that Business Investment has been falling (from 2008 onwards), and is now flat (at best). As a Contractor, it directly translates into unemployment for the last four years!

Andrew Marr referred to it and Max Hastings in reviewing the papers said these are’nt the stories its the rise in public spending thats the real story.

What I’ve seen lately being argued a lot is that its best to keep high public sector wages in cheaper regions as it means they can spend money in the shops to help the economy. So the great unwashed who mostly work in the private sector shouldn’t have their own money they have earned because it is better spent by public sector workers. Somehow that argument tries to mea that if the private sector workers keep more of their money it won’t help the economy, only public sector workers buying TVs will help the economy. They are so detached from reality and don’t know how insulting their arguments are.

Public Spending is going up, but MOST of it is going on debt servicing, neeed to tax the rich more so we can cut less of school building , ema etc

About John Redwood

John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.